ACCA members make good non-executive directors (NEDs). Sitting on the boards of directors of businesses, non-profit organisations and public sector bodies, they provide independent advice, strategic guidance and broad-based leadership, all of which are bread and butter for many senior finance professionals.
‘It’s often said financial acumen – a strong understanding of financial principles, including the ability to read and interpret financial statements – is crucial for overseeing an organisation’s financial health, and every NED needs this as a minimum,’ says Helen Pitcher OBE, chairman at the consultancy Advanced Boardroom Excellence.
‘I believe I’ve been particularly impactful in a guardian role as a board director’
‘Overall, NEDs contribute to board and organisational effectiveness by bringing diverse perspectives, specialist knowledge and strategic insights that complement the skills of the executive directors. Their role is crucial in guiding an organisation’s direction.’
Guardian and adviser
Peace Uwase FCCA currently serves as an NED at Access to Finance Rwanda, Ecobank Rwanda, Inkomoko and MTN Rwanda (see also her AB interview). ‘With my background in accounting, finance, risk management, compliance and regulation, I believe I’ve been particularly impactful in a guardian role as a board director – the internal stuff – focusing on financial reporting and monitoring performance against strategy, as well as ensuring adequate controls and risk management frameworks are in place to safeguard the organisation.
‘My expertise in public policy and understanding of the Rwandan business landscape have also enabled me to contribute as an adviser, especially in strategy formulation, resource allocation and aligning the organisation with government policies, laws and regulations.’
Providing finance expertise to non-governmental organisations (NGOs) in Ireland, Noel Lourdes FCCA is an NED for PACE and Clann Credo. Both not-for-profit organisations seek his expertise on general finance matters to assist the boards in instructing auditors, and in supervising the implementation of recommendations made by the auditors in improving internal controls.
‘Your attitude and character as a person are as important as your experience’
‘I feel both NGOs play a critical role in Ireland, where the government has a duty to society but does not have the structures to be more agile in delivering essential services,’ he says. ‘As an NED, and together with the board, we offer support to the management team in delivering these services.’
Top qualities
A good NED needs a mix of everything – skills and experience, but also personality, says Taiwo Ojoh FCCA, an NED at BAS Group in Nigeria, where he provides, among other things, guidance on regulatory compliance and risk management guidance.
‘Your attitude and character as a person are as important as your professional experience and training,’ he says. ‘You work with lots of people, some of whom might be of the same disposition and experience as you, while some will be very different.’
This really comes into play when dealing with challenges such as regulatory bottlenecks, business failures, economic slumps or a pandemic. ‘What comes to bear in such instances is not just training or industry experience, but clear-headedness, leadership, self-management, fortitude and adaptability,’ says Ojoh.
‘An NED who has served successfully in recession may be more valuable than a boom-time one’
‘Nevertheless, your skillset and the richness of your experience across industries, markets and cycles are vital. For example, an NED with a decade of relevant industry experience who has served successfully in an economic boom, recession and unexpected pandemic may be more valuable than a boom-time one with three decades of relevant industry experience.’
For Uwase, NEDs need extensive knowledge, skills and experience to fulfil their ‘duty of care’ and ‘duty of loyalty’, and to establish corporate culture and values. ‘They should be independent, possess high integrity and a strong reputation, and commit the necessary time to perform their duties effectively,’ she says.
‘Directors should also have strong emotional and social intelligence to be able to collaborate with fellow directors and management. They should be effective at building and maintaining relationships, as well as navigating complex situations.
‘But above all, curiosity is crucial – directors must be open to new ideas, eager to learn and stay informed.’
Before diving in
Lourdes emphasises the reputational risk faced by NEDs, especially in NGOs and charities. ‘In the blue-chip corporate world, NEDs are well remunerated and there are better structures in place to manage reputational risks,’ he says, which might be large-scale corporate failures and scandals – think Enron, Lehman Brothers, RBS and Anglo Irish Bank.
‘As NGOs do not have the resources to manage risks, there is a risk to NEDs’
‘However, there have been many cases of bailouts and financial scandals at NGOs, too,’ says Lourdes. ‘As these organisations do not have the resources to manage risks in a timely manner, there is a risk to NEDs. And as these roles are voluntary, NGOs end up being unable to attract sufficient talent.’
Uwase highlights how her board roles have required a significant time investment – ‘firstly to understand the organisation, its core challenges, its strategic orientation and the industry in which it operates; secondly, in preparation for meetings, which involves advance review board packs. Lastly, attending and actively participating in board and committee meetings requires attentive listening, probing management’s proposals with thoughtful questions, and offering insights drawn from my academic, professional and personal experiences.’
Being an NED also requires diplomacy, tact and leadership, she continues, requiring a communication style that ensures both the board and management remain aligned with the organisation’s mission and strategy, while maintaining a healthy relationship based on trust.
‘Equally important has been understanding the fine line between oversight and operational involvement, adhering to the principle of “nose in, hands out”, allowing management to execute without undue interference,’ she concludes.
Shaping the future of governance
ACCA has launched NED Space, a new hub for current and aspiring non-executive directors. Whether you’re taking your first steps towards an NED role or seeking to expand your network and knowledge, NED Space provides the tools, insights and community connections to help you thrive in today’s dynamic boardrooms.
